House prices in the UK are on average £20,000 more expensive than they were this time last year, despite showing signs that this growth is starting to slow.
Average house prices increased by 7.8% in the year from May 2021 to June, according to the Office for National Statistics.
This was down from an increase of 12.8% in May 2022.
Experts say that a perfect storm is heading for the UK’s property market, a combination of increasing mortgage costs, record inflation levels and the steep cost of living.
These factors will all continue to undermine demand levels in the coming months.
But over the past 12 months, the story has been one of growth, driven by low property numbers, lots of available capital, low interest rates and a desire to change homes during the pandemic.
Average prices increased over the past year to £305,000 in England, £213,000 in Wales, £192,000 in Scotland and £169,000 in Northern Ireland.
The biggest increase was in Scotland, where the average house price rose by 11.6% over the year.
In terms of regional changes, the east had the highest annual house price growth of anywhere in England, with average prices rising by 9.7% in the year to June 2022. This was down from a growth rate of 14.5% in May 2022.
The lowest house price growth in England was in the North East, where average prices increased by 3.6% over the year to June 2022, down from 10.9% in May 2022, according to the ONS.
The North East also had the lowest house price of anywhere in the country, averaging £158,000.
And it was property in London that remained the most expensive of any region in the UK, sitting at a record level of £538,000 in June 2022.
A survey published last week shows that despite waning demand, house prices are continuing to increase.
The Royal Institution of Chartered Surveyors found that 25% of property professionals reported new buyer inquiries falling in July – the third consecutive month of decline.
Expectations for sales in the next 12 months were the most gloomy since March 2020, when the COVID-19 lockdown began.
Higher interest rates and the cost-of-living crisis were cited as being among the causes, although the survey was carried out before the Bank of England raised rates by 50-basis-points last week – the biggest single jump since 1995.
Despite this, property prices are continuing to increase due to a lack of stock.
Some 63% of surveyors said they had seen prices increasing in July – down from the 78% seen in April but still above the long-term average.
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